graphic
Markets & Stocks
Bonds gain on tech slide
March 20, 2000: 3:25 p.m. ET

Slump in Nasdaq and oil fuel gains ahead of Fed monetary policy meeting
By Staff Writer Jill Bebar
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Treasury bonds ended higher Monday as a sharp decline among U.S. technology shares prompted investors to exit volatile stocks in favor of the relative safety of government securities.
    The tech-heavy Nasdaq composite index suffered a sell-off, falling over 3 percent late in the session. In addition, weakness in commodities, notably oil, contributed to gains for bonds.
    "These (the Nasdaq and oil) are the key factors driving prices higher in a very thin environment," said Bill Sullivan, senior economist at Morgan Stanley Dean Witter.
    Shortly before 3 p.m. ET, the 30-year bond rose 13/32 to 103-22/32. Its yield, which moves inversely to its price, fell to 5.98 percent from 5.99 percent Friday. Ten-year Treasury notes gained 6/32 to 102-11/32, their yield falling to 6.17 percent from 6.19 percent Friday.
    As higher commodity prices hint of inflation, fixed-income securities benefited from a slump in oil prices. In New York, April crude oil futures last traded down $1.28 at $29.63 a barrel, falling below the $30 level for the first time since late February. Traders attributed the decline to expectations that the Organization of Petroleum Exporting Countries (OPEC) will increase production at its meeting next week.
    
The Fed ahead

    Treasury prices had been confined to narrow trading ranges throughout the session ahead of Tuesday's Federal Reserve monetary policy meeting.
    The market's gains were more pronounced in longer-dated maturities as shorter-dated issues, such as two-year notes, remained pressured due to their sensitivity to interest rates
    Analysts were not surprised activity was subdued ahead of the Fed meeting, noting there also was a lack of key economic news to provide direction.
    Market strategists widely expect the central bank to increase short-term interest rates by a quarter-point Tuesday, bringing the fed funds rate, the rate at which banks charge each other for borrowing money, to 6 percent.
    With no signs of a U.S. economic slowdown, the Fed continued its "gradualist" tightening approach last month by raising rates a quarter point, its fourth hike since June. However, the economy remains strong and core inflation, which excludes volatile food and energy components, remains well behaved.
    Looking ahead, Bruce Alston, director of fixed income at Value Line Asset Management, was upbeat about Treasurys. He told CNN's Before Hours he expects bond yields to be "well below 6 percent" in one year. (174.6K WAV) (174.6K AIFF)
    
Dollar weakens

    The dollar fell slightly against the major currencies Monday. Shortly before 3 p.m. ET, the dollar changed hands at 106.32 yen, down from 106.89 yen Friday, a 0.5 percent loss in the dollar's value.
    Meanwhile, the euro traded at 97.35 cents, up from 97.19 cents Friday, a 0.2 percent loss in the dollar's value. "We're still consolidating in a broad trading range," said Marc Chandler, chief currency strategist at Mellon Financial Corp., referring to the euro.
    Chandler forecasts a further move to the upside, above the 97.50 level within a day or two. Back to top

  RELATED STORIES

Nasdaq falls; Dow gains - March 20, 2000

  RELATED SITES

View the latest market update via Netshow

See how your mutual funds are doing

Need investing advice? Try Quicken.com on fn

Investment advice from Zacks Investment Research

Track your stocks


Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney




graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.